Two Challenges to Renewable Energy Adoption in Indonesia
Climate Group’s Energy Director, Sam Kimmins, believes Indonesian industrial zones have significant interest in renewable energy adoption, though implementation is hindered by high costs and government policies. He states that the high price of renewable energy in Indonesia stems from a policy environment that does not support direct corporate investment in clean energy projects.
This situation makes it difficult for developers to secure cheap capital, keeping renewable electricity prices elevated. ‘The reason renewable energy is more expensive than it should be is the policy environment. If you can’t get direct corporate investment, it’s hard to lower prices,’ Kimmins said during the Climate Group Asia Action Summit in Singapore on Thursday, 21 May 2026.
Kimmins said the Climate Group aims to drive change through renewable energy-based industrial zones, as demand for green electricity in industrial areas is rising due to export and global supply chain requirements, including the EU’s Carbon Border Adjustment Mechanism (CBAM).
He added that renewable energy use could enhance Indonesia’s industrial zones’ appeal to global companies like Nike, Adidas, and New Balance, along with their suppliers. Many Indonesian suppliers work for multiple brands, making it hard to build their own renewable infrastructure. Developing renewable energy at the industrial zone level would allow companies to simply purchase green electricity from the zone’s operator.
Kimmins also highlighted the RE100 campaign’s progress globally, noting success often begins with one local company joining, followed by others seeing the feasibility of clean energy transition. In some countries, this process takes weeks, while others take months or years. Currently, 122 RE100 member companies purchase renewable electricity in Indonesia.
He said multinational RE100 members can transfer knowledge to Indonesian firms on buying renewable power and building low-emission supply chains. He believes a larger RE100 movement will boost corporate confidence in switching to clean energy.
Kimmins views Indonesia’s commitment to 100 gigawatts of renewable energy as a positive signal for investors. Companies need assurance the government is responsive to market needs; he cited LEGO’s Vietnam facility decision influenced by power purchase agreements and shared grid usage.
He stressed that access to renewable electricity is now critical for global investment decisions, urging swift government action to keep Indonesia competitive as an international supply chain destination. However, he noted Indonesia’s government is open to energy transition discussions, with constructive dialogue and willingness to change, despite the challenges of reforming a decades-old fossil fuel-dependent energy market.